Industrial REIT suspends acquisitions and expects tough conditions
(Alliance News) – Industrials REIT Ltd said on Friday it had largely suspended acquisitions as it warned that “the business environment will become more challenging over the next 12 months.”
The London-based real estate investment trust, which invests in multi-let industrial properties in the UK, said it had largely ceased investment activities as the UK commercial property market adjusted down due to rising interest rates, high inflation and a growing risk of recession.
“In the meantime, we are preserving capital, keeping our leverage low and waiting for an appropriate time to re-enter the market when values stabilize,” Industrials REIT said.
“We continue to watch the market closely and believe attractive and accretive acquisition opportunities will emerge once the market moves through a period of price revision,” said Paul Arenson, CEO of Industrials REIT.
During the second quarter to September, the company completed two multi-tenancy industrial acquisitions for a total of £5.2 million.
The group said 88% of rent due in the second quarter ended September 30 had been collected by October 26, compared to 87% of rent collected in the first quarter.
Industrials REIT expects rent collections for the year ending March 31 to normalize to pre-Covid levels of over 98%.
The occupancy rate stood at 92.8% in the second quarter against 93.5% in the first quarter.
The group said it had taken proactive steps to waive and replace non-performing leases that had been protected by the pandemic moratorium for years ending March 31, 2022.
Arenson said tenant demand remained strong, but warned he expected the business environment to become more challenging over the next 12 months. But to date, the company had seen no evidence of it in its portfolio.
In London, shares of Industrials REIT fell 2.1% to 131.18 pence on Friday. They rose 1.4% to ZAR 27.97 in Johannesburg.
By Artwell Dlamini; firstname.lastname@example.org
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